I just finished listening to President Obama’s jobs speech. “If at first you don’t succeed, try, try again,” appears to be his motto. He wants more temporary tax breaks, more targeted tax increases, more politically targeted beneficiaries, more government spending. No failed policy that puts power in the hands of government can fail badly enough to stop Obama from trying it again.
Here are just a few thoughts on the specifics:
1) He laments public school teacher layoffs. Based on this information from education researcher Eric Hanushek writing in Education Week magazine last year, maybe we should lay off many more teachers: “Reporting about projected teacher pink slips is an annual game, dating back well before the current recession. Little note is made, however, when teacher employment actually continues to grow much more rapidly than student enrollment. In the most recent data, for example, we see that student enrollment in 2007 is 22 percent greater than in 1990, but teacher employment is 41 percent greater. Since 2000, the comparable figures are 5 percent for growth in enrollment and 10 percent for teachers.”
2) Obama cited mult-billionaire Warren Buffett paying lower tax rates than his secretary and calling for government to tax him and his fellow billionaires more. Buffett could easily pay more by not taking deductions and exemptions that his business lobbyists have helped put into the tax code, or he could simply write a big check to the Treasury Department. He could start by paying the $1 billion the government says his Berkshire Hathaway currently owes in back taxes. He could also ask for the government to lower the tax rate on his secretary and others like her.
3) Obama wants more targeted tax credits, such as $4,000 for hiring a person who’s been looking for work at least six months. If a company does not have enough work to hire the person now, the only way the tax credit would make economic sense is if the company will pay the person less than $4,000. How likely is that? And what’s the company to do with the employee after the credit expires?
4) Obama wants $85 billion more for state and local governments, $50 billion for government transportation projects, and $49 billion for government unemployment insurance program. That’s $184 billion of the $450 billion — approximately 40 percent — of the stimulus going directly to government.
5) George W. Bush signed a $168 billion stimulus bill with tax breaks for businesses and individuals in 2008. In 2009 Obama signed an $826 billion stimulus bill with tax breaks, infrastructure spending, money for local governments, etc. That’s $988 billion of stimulus since 2008, in addition to the trillions of dollars of federal, state and local government spending that were being done anyway. If all that stimulus and other government spending has not boosted employment, how is another $450 billion of stimulus going to do that?